Thursday, January 31, 2013

In latest debt-ceiling move, Treasury to tap Thrift Savings
Plan money - (www.washingtonpost.com)
The Treasury Department said Tuesday it would begin
tapping civil service retirement funds because Congress has not
raised the federal debt ceiling, the latest reminder that time is running out
before the government is at risk of defaulting on the national debt. The action
will allow the government to spend $156 billion that otherwise would have been
invested in the federal Thrift Savings Plan. As a result of that action and
others the Treasury is taking, Congress has until between mid-February and
early March to raise the $16.4 trillion debt limit. So long as the debt ceiling
is raised on time, federal workers and retirees should not be affected.

MFI-Miami
In Talks With Black Panthers To Help Battle Illegal Eviction By Taxpayer Owned
Fannie Mae - (www.mfi-miami.com) Eviction Battle Over Inner-City Teacher Could Get Dicey For Bailed Out
GSE: Steve Dibert, President of MFI-Miami, an
internationally recognized leader in investigating mortgage fraud, announced
that MFI-Miami is in talks with the Detroit Chapter of the New Black Panther
Nation/New Marcus Garvey Movement to join the fight to keep Amy Plumb, an
inner-city school teacher from Genesee County, Michigan from being evicted by Fannie Mae and their attorneys, Orlans
Associates. Orlans Associates is home to alleged multi-state
robo-signer Marshall Isaacs. “I’m
excited about the possibility that the New Black Panther Nation/New Marcus
Garvey Movement will be joining us in this fight to keep Ms. Plumb in her
home,” said MFI-Miami President
Steve Dibert, “She’s been dealt a bad hand by the Michigan legal system
that is clueless about the systemic breakdown and utter corruption of the U.S.
financial system. I’m hoping their involvement will get Fannie Mae’s attention”

Ms. Plumb, a teacher who specializes in
working with at-risk elementary school children in the heart of economically
ravaged Flint, Michigan, is a victim of whatMFI-Miami believes to
be an illegal foreclosure and eviction by taxpayer ownedFannie Mae and their taxpayer owned
servicer, Citimortgage.

Secrets of the crisis revealed: What to expect from transcripts
of 2007 Fed meetings - (www.washingtonpost.com)
This is a big deal. It will be our first official glimpse into
policymakers’ deliberations during the crisis, or at least its earliest phases.
We will gain a better understanding of what the Fed knew and when it knew it.
The release of 2006 transcripts last January was fascinating for the portrait
painted of Fed officials failing to grasp the grave peril facing the economy;
the 2007 transcripts should show us when and how that assessment changed—and
how they came to take some early actions to combat it. Here is what to expect
out of the transcripts, based on both minutes of the meetings and my reporting
over the years with people who were in the room: A slide toward pessimism. Recall
that 2007 was a year in which the U.S. economy largely held up—the recession
didn’t begin until December. But it was also a year in which long-building
fissures in the global financial system started to become evident. The start of
the global financial crisis can be dated to Aug. 9, 2007, when the European
Central Bank first intervened to prop up the continent’s banks.

In French malaise, a broader source of risk - (www.washingtonpost.com) As France’s socialist government raised taxes on the wealthy and
threatened to nationalize a steel plant last year, neighboring Spain reveled in
the news that exports were rising and several auto plants would be expanded by
their owners. It was a small sign of what could become a defining trend in the
euro zone. The most troubled nations, including Spain, have slashed wage costs
and overhauled labor and social rules in an effort to become more competitive. Now
there is mounting pressure on France to do the same — or risk falling behind in
Europe’s struggle for economic revival. The government of new President
Francois Hollande has veered between promises of reform and sometimes fiery
attacks on corporate interests and the rich, a fact that has worried public
officials in Washington and elsewhere about the direction of the euro zone’s
second-largest economy. “France is losing ground in a relative sense to these
other countries,” said Edward Gardner, assistant head of the IMF’s Europe
department. “The outlook remains very weak, not only because of external
conditions [in the global economy], but also an internal lack of dynamism.”

Russia
Says World Is Nearing Currency War as Europe Joins - (www.bloomberg.com)
The world is on the brink of a fresh “currency war,” Russia warned, as
European policy makers joined Japan in bemoaning the economic cost of rising
exchange rates. “Japan is weakening the yen and other countries may follow,” Alexei Ulyukayev, first deputy chairman of
Russia’s central bank, said at a conference today in Moscow. The alert from the
country that chairs the Group of 20 came as Luxembourg Prime Minister Jean-Claude Juncker complained
of a “dangerously high” euro and officials in Norway and Sweden expressed exchange-rate concern. The push for
weaker currencies is being driven by a need to find new sources of economic
growth as monetary and fiscal policies run out of room. The risk is as each
country tries to boost exports, it hurts the competitiveness of other economies
and provokes retaliation.

Wednesday, January 30, 2013

Muni
arrives in S.F.'s top overtime spot - (www.sfgate.com)
San Francisco municipal overtime spiked $18 million over budget in the
first year of Mayor Ed Lee's administration - with one Muni
mechanic raking in an extra $163,856. Khoa Trinh, who heads the
Muni signal shop, more than doubled his base of $106,036 by clocking in 1,954
hours of overtime - which is roughly equal to working an extra 40 hours a week,
every week, at $83.85 an hour. Add in more than $23,000 in premium pay and
shift differentials, and Trinh's salary for fiscal 2011-12 totaled $293,370. As
for how he could pile up all those hours: "We had to do a lot of work at
night, when the trains weren't running, to get the new train control system
working," said Muni chief Ed Reiskin. While Trinh was
tops in OT earnings, Muni Transit Supervisor Evette Geer-Stevens clocked
the most hours - with 2,262 hours of overtime, for $147,446. According to
Reiskin, Geer-Stevens is one of the supervisors you often see on street
corners, keeping an eye on the buses and trains - and helping out
in emergencies. Last year, 10 Muni supervisors made more than $100,000 in
overtime - bringing their pay to $200,000-plus apiece.

Ranks of working poor increasing - (www.washingtonpost.com) Nearly a third of the nation’s working families earn salaries so low
that they struggle to pay for their necessities, according to a new report. The
ranks of the so-called working poor have grown even as the nation has created new jobs for
27 consecutive months and is showing other signs of shaking off the worst
effects of the recession. “Although many people are returning to work, they are
often taking jobs with lower wages and less job security, compared with the
middle class jobs they held before the downturn,” said a report released
Tuesday by the Working Poor Families Project, a
national initiative aimed at fostering state policies to help low-income
working families. With the nation’s economy in recovery, the report said, more
than 70 percent of low-income families and half of all poor families were
working by 2011, the report said. The problem is they did not earn enough to
cover their basic living expenses.

U.S. Crop-Insurance Claims Rise to Record After 2012 Drought
- (www.bloomberg.com) The worst U.S. drought since the 1930s led to record payouts on
crop-insurance claims, with farmers collecting $11.581 billion as of yesterday
for damage in 2012, government data show. Payments are up 6.8 percent from
2011, when claims reached the previous record of $10.843 billion, according to
a Risk Management Agency report published
today on the U.S. Department of Agriculture website. In 2010, the total was
$4.251 billion. Last year’s Midwest drought sent corn and soybean prices
surging to records as output fell, while dry fields across the Great Plains
left winter-wheat conditions in November at their worst since at least 1985,
when the USDA began collecting the data.

Hedge funds nurse heavy losses after UPS-TNT deal collapses
- (www.reuters.com) United Parcel Service's decision to abandon its 5.2 billion euro bid for
TNT Express has left hedge funds nursing
potential losses of more than $700 million, as the Dutch delivery firm's shares
slid. So-called merger arbitrage funds - which make money betting on the
outcomes of corporate events including takeovers - are estimated to have owned
around 30 percent of TNT shares before Monday's news European anti-trust regulators would veto
it, several sources familiar with the sector said. With TNT shares losing half
their value when the market opened and ending the day down 41 percent, funds
collectively could have lost more than 540 million euros. "This was one of
the only large, liquid, all-cash deals in Europe right now. It's going to have
been really painful across the street," one merger arbitrage manager who
owned TNT shares before selling them on Monday morning told Reuters.

Fitch warns on US and Spanish ratings - (www.reuters.com) The United States faces a "material risk" of losing its
triple-A status if there is a repeat of the wrangling seen in 2011 over raising
the country's self-imposed debt ceiling, credit ratings firm Fitch said on
Tuesday. Fitch also said Spain will continue to face downgrade risks even if it
avoids having to ask for a bailout, while Ireland could claw its
way back into the single-A rating band if a deal is struck to share the burden
of its banking debts. Despite December's deal by U.S. politicians to avoid the
so-called "fiscal cliff" of spending cuts and tax hikes, Fitch's head
of sovereign ratings, David Riley, said pressure on the country's rating was
increasing.

Banks tighten loan standards, see more coming: ECB - (www.reuters.com) Banks began early repayment
of crisis funds to the European Central Bank on Wednesday, shrinking the ECB's
balance sheet while the world's other big central banks are still spending to
support their economies. Combined with lackluster demand for weekly funding, it
helped boost the euro to its highest level against the dollar since November
2011. An ECB survey separately showed that banks' access to market funding
improved in recent months following the ECB's pledge to do what it takes to
preserve the euro and the launch of a new bond purchase program. However, new
capital requirements and financial regulation led them to toughen loan
standards.

Analysis: Pall of bank "legacy assets" hangs over
euro zone - (www.reuters.com) In September last year, at a
below-the-radar meeting in Helsinki, three euro zonefinance ministers came up with a two-word
phrase that sounded harmless at the time but has since troubled European
leaders a great deal. Banks' "legacy assets" sound
innocent enough but in the context of Europe's debt crisis, and particularly
for Ireland and
Spain, the question of how to deal with existing bad debts is a time bomb that
has not been defused. In the months since the term entered the EU's lexicon,
efforts have been made to parse it or play it down. But those that came up with
it -- the finance ministers of Finland, Germanyand the Netherlands -- appear
determined to keep it alive, and until June 2013, the deadline leaders have set
themselves to resolve it, the issue will fuel uncertainty.

Spain Recession Deepens More Than Forecast Amid Austerity -
(www.bloomberg.com) Spain’s recession deepened more than
economists forecast in the fourth quarter as the government’s struggle to rein
in the euro region’s second-largest budget
deficit weighed on domestic demand. Gross domestic product fell 0.7
percent in the three months through December from the previous quarter, when it
declined 0.3 percent, the Madrid-based National Statistics Institute said today. That’s more than the 0.6
percent contraction the Bank of Spain predicted on Jan. 23. GDP dropped 1.8
percent in the fourth quarter from a year earlier and 1.37 percent in the full
year from 2011, INE said. The European Commission this week signaled it may
recommend easing Spain’s budget goals for the fourth time in a year as
unemployment in the euro region’s fourth-largest economy rose to a record 26
percent at the end of Prime Minister Mariano
Rajoy’s first year in power.

Fed Risks Losses From Bonds - (online.wsj.com) The Federal Reserve could be
charting a course that leaves the highly profitable central bank with no extra
income to hand over to the U.S. Treasury for several years. That is the conclusion of five Fed staff
economists who examined how the central bank's bond-buying
programs will affect its profitability over the long run. Right now the Fed is earning large returns on its
bond portfolio and sending most of its profits to the Treasury. Several years
from now, when the economy is stronger, the Fed is expected to sell bonds and
raise short-term interest rates to tighten credit and restrain inflation. The
group found the Fed might have to sell bonds at a loss and incur higher
expenses on interest it pays to banks on the reserves they hold at the Fed.

Tuesday, January 29, 2013

'Zombie
titles' haunt victims of house foreclosure - (www.nbcnews.com) Joseph Keller doesn't expect he'll live to see the end of 2013. He
blames the house at 190 Avondale Avenue. Five years ago, Keller, 10 months
behind on his mortgage payments, received notice of a foreclosure judgment from
JP Morgan Chase. In a few weeks, the bank said, his three-story house with gray
vinyl siding in Columbus, Ohio, would be put up for auction at a sheriff's
sale. The 58-year-old former social worker and his wife, Jennifer, packed up
their home of 13 years and moved in with their daughter. Joseph thought he
would never have anything to do with the house again. And for about a year, he
didn't. Then it started to stalk him. First, in 2010, the county sued Keller
because the house, already picked clean by scavengers, was in a shambles, its
hanging gutters and collapsed garage in violation of local housing code. Then
the tax collector started sending Keller notices about mounting back taxes,
sewer fees and bills for weed and waste removal. And last year, Chase's debt
collector began pressing Keller to pay his mortgage, which had swollen, with
penalties and fees, from $62,100.27 to $84,194.69.

AIG
sues NY Fed over right to sue Bank of America, others - (www.reuters.com) American International Group Inc has filed a lawsuit against a vehicle
created by the Federal Reserve Bank of New York to help bail out the insurer,
in a bid to preserve its right to sue Bank of America Corp and other issuers of
mortgage debt that went sour. The complaint, filed in the New York State
Supreme Court in Manhattan, seeks a declaration that AIG has not transferred
billions of dollars of "litigation claims" to Maiden Lane II, including
many related to the insurer's $10 billion lawsuit against Bank of America. Maiden
Lane II was created in December 2008 to buy residential mortgage-backed
securities (RMBS) from AIG and ease liquidity strains.

Obama refuses to negotiate debt ceiling raise - (www.reuters.com) The showdown over the nation's debt ceiling could force the government
to consider drastic steps to manage its limited cash, including delaying
trillions of dollars of payments to employees, Social Security recipients, contractors
and others. The Obama administration has said it
has no backup plan to pay the government's bills if Congress refuses to raise
the $16.4 trillion federal borrowing limit. The White House said Saturday in a
statement that "there are only two options to deal with the debt limit: Congress
can pay its bills or it can fail to act and put the nation into default." The Treasury could be forced to revisit proposals it
considered during the 2011 borrowing-limit crisis, most of which it said were
unworkable. Those included selling assets such as gold or mortgage-backed
securities to raise funds, cutting all spending by 40% or prioritizing some
payments over others—for example, paying Social Security recipients before
military contractors.

Ugly Choices Loom Over Debt Clash - (online.wsj.com) President Barack Obama on Monday rejected any negotiation with
Republicans over the most pressing U.S. fiscal issue, refusing to trade cuts in
government spending in exchange for raising the borrowing limit. "If the
goal is to make sure that we are being responsible about our debt and our deficit - if
that's the conversation we're having, I'm happy to have that
conversation," Obama said. "What I will not do is to have that
negotiation with a gun at the head of the American people," he told a news
conference. Republican leaders quickly reiterated their demand that increasing
the debt limit must be accompanied by spending cuts. With an agreement to
prevent the so-called fiscal cliff of sharp spending cuts and tax increases
barely two weeks old, Obama faces another fiscal showdown with congressional
Republicans.

Breaking
News: OMFIF Report Advocates the Official Re-monetization of Gold - (www.financialsense.com) In a report published today, the Official Monetary and Financial
Institutions Forum (OMFIF), a global organization of central banks and
sovereign wealth funds, recommends that gold be re-monetized
for use as international money, alongside major currencies. OMFIF gives a number of reasons for this but they
boil down it to gold's historical role in establishing and
maintaining confidence and stability in international monetary relations. Such
confidence and stability have dramatically declined as a result of the global
financial crisis that began in 2008, to the detriment of the global economy.

Monday, January 28, 2013

Pentagon moving to freeze hiring, delay contracts - (finance.yahoo.com) The Pentagon will begin
taking steps to freeze civilian hiring, delay some contract awards and curtail
some maintenance to prepare for drastic budget cuts if Congress can't reach an
agreement on a final spending plan, Defense Secretary Leon Panetta said
Thursday. Speaking to reporters, Panetta said that department officials must
also develop detailed plans to implement unpaid furloughs for civilian
personnel. The furloughs would kick in if the automatic cuts are triggered. But
Panetta said he has asked defense leaders to ensure that any initial moves they
make now should be reversible if at all possible, and they must minimize
harmful effects on military readiness. "The simple fact is that this
fiscal uncertainty has become a serious threat to our national security,"
Panetta said during a Pentagon press conference. "We really have no choice
but to prepare for the worst."

Jack Lew had major role at Citigroup when it nearly imploded
- (www.washingtonpost.com) Treasury secretary nominee Jack Lew has spent most of his
career in government, but during the financial crisis, he was embedded inside
one of the country’s biggest banks as it nearly imploded. From 2006 to 2008, he
worked at Citigroup in two major roles, a notable line in his résumégiven that
as Treasury secretary, he would be charged with implementing new rules
regulating Wall Street. But Lew did not have just any position at the bank. In
early 2008, he became a top executive in the Citigroup unit that housed many of
the bank’s riskiest operations, including its hedge funds and private equity
investments. Massive losses in that unit helped drive Citigroup into the arms
of the federal government, which bailed out the bank with $45 billion in
taxpayer money that year. The group had been under pressure to compete with
similar units at other big Wall Street firms and, some analysts say, took on
too many risks as it played catch-up. “The mismanagement of risk was
comprehensive at that organization,” said Simon Johnson, an economist at the
Massachusetts Institute of Technology.

Who
is going to buy all those houses in Calif when the Gen X/Yers retire? -
(www.telegraph.co.uk) California is in the midst of
an unprecedented decline in its child population. Falling birth rates, a
decrease in migration and the retirement of the 'baby boom' generation are
threatening the future prosperity of America's most populous state, a new report
has revealed. The report, by the University of Southern California (USC), shows
that in 1970 children made up one third of the state's population. By 2030 that
number is expected to have declined to one fifth. "After decades of
burgeoning population and economic growth the state now faces a very different
prospect," the report, titled California's Diminishing Resource: Children,
said. Its author Dowell Myers, a USC demographer, said: "We have a massive
replacement problem statewide." He added: "These trends are not yet
widely recognised, but they should be a wake-up call for policymakers.

Banks
Get Away With Huge Robosigning Fraud By Paying Portion of Illegal Profits -
(www.zerohedge.com) The chapter on robosigning, i.e., Fraudclosure, is now
closed with a $10 billion wristslap on US banks, of which a whopping $3.3
billion in the form of direct cash and $5.2 billion in "other
assistance." The banks who are now absolved from any and all Linda Green
transgressions in the past include: Aurora, Bank of America, Citibank, JPMorgan
Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. And
so, banks can resume to resell properties with mortgages on which the original lien
may or may not have been lost in the sands of time. From the Fed: Independent Foreclosure Review to
Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance: Ten
mortgage servicing companies subject to enforcement actions for deficient
practices in mortgage loan servicing and foreclosure processing have reached an
agreement in principle with the Office of the Comptroller of the Currency (OCC)
and the Federal Reserve Board to pay more than $8.5 billion in cash
payments and other assistance to help borrowers.

Bank
of America Pays Far Less in Settlements Than Profits From Causing Bubble - (finance.yahoo.com) The mortgage settlements just
keep coming. On Monday morning, Bank of America said it reached an agreement to resolve
virtually all existing and future claims that it (and mortgage lender
Countrywide, which BofA bought in 2008) misrepresented the quality of home
loans it sold to Fannie Mae from 2000 through 2008. In the deal, Bank of
America is paying $3.6 billion in cash and is also repurchasing about 30,000
mortgages for $6.75 billion. That money all goes to Fannie Mae, the government-sponsored
enterprise that taxpayers bailed out in the financial crisis. Bank of America
is paying for the deal by tapping into reserves it had already set aside for
mortgage-related losses, plus is kicking in an additional $2.5 billion. That
Bank of America needed to draw on extra money has some bank watchers nervous
that it hasn’t set aside enough money for other outstanding mortgage cases.

Sunday, January 27, 2013

Government
house loan guarantees ensure the misallocation of credit - (www.ochousingnews.com) Government interference in
credit markets isn’t new:::Bastiat,
Frédéric — (1801-1850): At all times, but especially in the last few years,
people have dreamt of universalizing wealth by universalizing credit. I am sure
I do not exaggerate in saying that since the February Revolution the Paris
presses have spewed forth more than ten thousand brochures extolling this
solution of the social problem. This solution, alas, has as its foundation
merely an optical illusion, in so far as an illusion can serve as a foundation
for anything. These people begin by confusing hard money with products; then
they confuse paper money with hard money; and it is from these two confusions
that they profess to derive a fact. In this question it is absolutely necessary
to forget money, coins, bank notes, and the other media by which products pass
from hand to hand, in order to see only the products themselves, which
constitute the real substance of a loan. For when a farmer borrows fifty francs
to buy a plow, it is not actually the fifty francs that is lent to him; it is
the plow. And when a merchant borrows twenty thousand francs to buy a house, it
is not the twenty thousand francs he owes; it is the house.

Spain’s Shrinking Bank Network Leaves CaixaBank Top-Heavy -
(www.bloomberg.com) CaixaBank SA is among lenders
that look increasingly bloated as Spain’s economic slump adds pressure on banks
to cut branches after the busted credit boom. CaixaBank has 6,631 branches to
serve its 13.2 million customers, or one branch per 1,991 clients. That
compares with 3,093 clients for each of the 4,752 Spanish branches run by Banco Santander SA, the country’s biggest
lender, and 3,215 customers at Banco Popular Espanol SA. An economic
crisis afflicting Spain follows a decade-long credit boom that saw the number
of bank branches surge to the highest per capita in Europe. While lenders
including Bankia and Santander have announced plans to close more than 2,000
branches in an economy already grappling with a recession and the region’s
highest jobless rate, banks may have to shrink further. “Spain has this problem
that it is excessively banked,” said Alvaro Cuervo,
director of the University College of Financial Studies in Madrid. “It’s not
over.”

Deep Cuts Raise Questions About Morgan Stanley - (www.nytimes.com) When Morgan
Stanley’s top executives gathered in mid-September at the Gramercy
Park Hotel in Manhattan to discuss strategy, some participants complained that
the room was too small. Apparently, that was the point: James P. Gorman, Morgan
Stanley’s chief executive, chose the cramped quarters to force discussion among
the executives, said people briefed on his decision but not authorized to speak
on the record. These days, it is the Wall Street firm that is finding itself a
bit boxed in. Regulatory demands, weak markets and lower credit ratings have
weighed on all banks, but perhaps more so on Morgan Stanley, the smallest of
the big Wall Street firms. In the three years that Mr. Gorman, 54, has been at
the helm, the bank has been progressively shrinking its business of trading
bonds, commodities and other investments and expanding into wealth management.

Danish Mortgage Banks Mull Lifeline to Homeowners: Nordic
Credit - (www.bloomberg.com) Denmark’s
$500 billion mortgage industry is looking at how to keep struggling homeowners
afloat as the nation’s push into interest-only loans a decade ago now threatens
a jump in losses amid rising unemployment. Loan writedowns for mortgage
banks in Denmark jumped 51 percent in the first half of last year, according to
a report released last month from the financial regulator. Losses rose 17
percent in 2011, compared with a 25 percent drop in provisions at 35 of Germany’s
largest credit banks and a 55 percent drop in net loan losses at Sweden’s
mortgage lenders. Loans that allow principal payments to be postponed by as
many as 10 years now comprise more than half of outstanding mortgages after
being introduced in 2003. Denmark’s two mortgage banking groups, whose members
include Nykredit A/S, Europe’s biggest issuer of home-loan backed
bonds, are in talks with regulators on how to help homeowners unable to meet
principal payments or refinance into similar loans.

House
Builders Lobby Weakens Drywall Legislation - (www.propublica.org) Last week, federal lawmakers trumpeted the passage of the Drywall Safety Act of 2012 as a
bipartisan victory for thousands of homeowners harmed by contaminated drywall. "This
is a bill about protecting American families — their health and financial
well-being," said Rep. Scott Rigell, R-Va., the measure's primary sponsor
in the House. "It is up to Congress to ensure that preventative standards
are in place so no American family is faced with the hardship and heartache
from contaminated drywall ever again." But the bill doesn't actually set
preventative standards. Instead, it asks an industry association committee
comprised mostly of drywall manufacturers and builders to develop voluntary
limits on sulfur content in drywall for the government to enforce.

Thursday, January 24, 2013

Raging
Against Possible AIG Lawsuit; JPM Personnel Changes Continue - (www.americanbanker.com) Seriously, AIG?: We had
a feeling the Internet was going to let out a collective groan once the news
that AIG was considering a lawsuit against
the federal government over its $182 billion bailout was picked up by news
outlets and made the rounds on Twitter. (To summarize, the firm is being asked
to join a suit originally launched by former CEO Maurice Greenberg, who claims
the terms of the bailout were too harsh and deprived shareholders of billions
of dollars.) And, oh, what a collective groan it was. "AIG, bailed out by
U.S., may now sue U.S., claiming bailout terms were too harsh. We should
counter-sue for stupidity," Berkeley professor and former U.S. Secretary
of Labor Robert Reich tweeted with a link to an article from
ABC news explaining the potential suit.
"AIG considers suing government for bailing it out, world implodes in on
itself," one Washington Post headline reads.
Blogger Andrew Borowitz penned a satirical letter from AIG to the taxpayers for
the New Yorker. (Sample line: "by suing … we are standing up for one
of the most precious American rights of all: the right to sue someone who has
just saved your life.") And David Weidner from MarketWatch goes so far as
to suggest the government retaliate by charging AIG with treason.

Short
sales in California surpass sales of foreclosed homes - (www.latimes.com) In recent months, short sales
have surpassed sales of foreclosed homes in California for the first time since
the start of the housing crash in 2007, data show. When housing prices first
went off the cliff, most mortgage lenders refused to cut deals with homeowners,
choosing instead to repossess homes on a grand scale. Five years and billions
of dollars in losses later, many banks can't cut those deals fast enough,
writing off large chunks of mortgage debt and even paying homeowners to move
out. In recent months, short sales — in which banks allow homeowners to sell
for less than they owe — have surpassed sales of foreclosed homes in California
for the first time since the start of the housing crash in 2007, according to
real estate research firm DataQuick. The transactions now represent about a
quarter of the market, a surge driven by rising home prices, government
crackdowns on foreclosures and banks' increasing capacity to process the deals.

Greek
Banks to need more money for their recapitalization - (www.ekathimerini.com) Surprise, Surprise!!!The country’s main banks are considering requesting additional
funds for their recapitalization. Senior bank officials say that the rapid
deterioration in financial conditions caused by the back-to-back elections in
mid-2012 has led to a greater increase in nonperforming loans than originally
foreseen in the BlackRock report a year ago. They add that banks should proceed
to greater share capital increases in order to respond to the new reality. Ernst
& Young estimates that nonperforming loans in Greece approached 24 percent
of all loans at the end of 2012.

Morgan Stanley Said to Cut 1,600 Investment-Banking Jobs -
(www.bloomberg.com) Morgan Stanley, the sixth-largest U.S. bank
by assets, plans to eliminate about 1,600 jobs from its investment bank and
support staff in coming weeks, a person familiar with the matter said. The cuts
total about 6 percent of the New York-based company’s institutional securities
group, which includes investment banking and trading units, and support staff,
the person said, asking not to be identified because the decision hasn’t been
made public. About half the reductions will be in the U.S., the person said. Morgan
Stanley reduced its staff by about 4,200 people in the first nine months of
last year through job cuts and unit sales, after saying in December 2011 it
would eliminate 1,600 jobs. Chief Executive Officer James Gorman, 54,
has pledged to lower costs as return on equity remains below the bank’s cost of
capital.

The California Social Contract
(redux) - (www.ochousingnews.com)
You fence-sitters are failing
to fulfill your part of the California Social Contract. Your failure to
continue buying homes is disrupting the social order, and it is causing those
of us who bought before you psychological, emotional and financial damage. It
is time for you to get off the fence and buy–NOW!!! In any social contract, you
give up something personally for the greater good. When those of us who bought
before you purchased our homes, we had to commit unrealistic percentages of our
income to housing, lie on mortgage applications, and take out financing on
unstable mortgage terms in order to do our part for the continuing social good.
We made these sacrifices willingly because the benefits of maintaining the
social contract are worth the price we paid.